A professional services firms reputation. Intangible? Nebulous? Incalculable? Why bother?
Do firms actively manage their corporate reputation?
Every organisation has a reputation, whether they proactively manage it or not!
Our stance is: manage your reputation properly, and you can leverage it to differentiate and achieve a competitive advantage.
What do we mean by ‘corporate reputation’?
Corporate reputation is the totality of perceptions of a firm held by a range of stakeholders. It’s a product of an organisation’s behaviour, communications and symbols, and should be considered in the context of an organisation’s corporate objectives.
Importantly, it has the potential to be controlled and influenced by an organisation, to engender valuable and much sought-after stakeholder responses such as credibility, trust, responsibility and reliability.
How can firms approach reputation management?
A firm’s reputation needs to be high on the strategic agenda.
As a fundamental part of a firm’s corporate strategy, strategic reputation management should achieve transformation of corporate reputation into physical reputational capital.
Firms need to think wider than their own client base. There is a tendency among firms to only consider reputation in the eyes of clients and how clients perceive the firm.
But reputation management is far wider.
The purpose of reputation management is to ensure that multiple stakeholders’ needs – both internal and external – are considered and acted on, in support of organisational objectives. This can be achieved by analysing stakeholders’ proximity and contribution to corporate objectives, to identify the action required to close any perceptional gaps among those stakeholder groups.
Some stakeholders will always be considered more important than others (clients, partners and employees topping the list), but it would be detrimental to focus solely on these. Intermediaries, media and the many other groups each hold varying degrees of influence requiring management and enhancement for reputational benefit.
So what can firms do to protect and enhance this oft-neglected yet omni-precious asset?
Measuring corporate reputation
It starts with measuring your current corporate reputation!
How?
This entails identifying and evaluating reputational strengths and weaknesses by stakeholder group, under three key components:
- Behaviours
The behaviour of employees is an important component of a firm’s identity and influencer of reputation. Every firm has its own rules (implied or other) and its own distinctive culture. Culture has a huge impact on reputation. By analysing its own organisational behaviours the firm will unearth ways of enhancing the perceptions of its employees about the organisation.
It’s important to stress however this goes way beyond tokenism. Your employees are your most powerful advocates, and a sincere and authentic drive to improve their experience and your contribution as an employer must be the key driver. Enhanced reputation will follow.
Ex-employees for example are an important stakeholder group. Many firms we know treat exiting employees quite poorly. For large firms, the number of ex-employees with negative views of the firm which are often shared, can have a huge impact on reputation.
Also consider suppliers. Suppliers in the market place that are not being paid on time may share their experience with others, fuelling negative perceptions.
The key is to treat all stakeholders as having a role to play in positive reputation management.
- Communications
Firms need to communicate with all stakeholder groups. This means going beyond ‘client communications’ and developing corporate communication tools, aimed at each of the stakeholder groups. Here we are looking at communications as a whole, and not just central marketing team outputs. Management communications and operational communications carry equal influence on a reputational level.
A reputational audit will identify which stakeholder groups are being communicated with and how frequently, and will establish where the weaknesses are, taking relevance, key messaging, channel, consistency and other variables into consideration for improvement.
- Design & symbolism
There are a number of tools firms can use to build corporate brand, including the corporate name, colours and logo. The corporate logo and text should be recognisable and symbolise the organisation’s individual identity.
How well these are leveraged however should be assessed within an audit. For example, a lack of brand control would represent a reputational risk, with inconsistencies impacting external perceptions negatively.
Closing gaps across these three areas for each stakeholder group will be essential in improving overall reputation score and financial return in the long-term.
Failure to manage corporate reputation
Failure to manage reputation equates to business risk, and reputation becomes a liability. Risk to reputation arises when an organisation fails to meet the expectations of a specific stakeholder group, and lies in the gap between expected and actual behaviour.
When reputation is gravely injured, it is difficult for an organisation to recover. Negative reputations can at worst result in a loss of clients, unmotivated employees, partner dissatisfaction and ultimately the demise of the business itself.
The proliferation of digital channels can also exacerbate the impact of negative reputation. But they can conversely support in the management and enhancement of reputation.
Failure to manage reputation also overlooks the value of goodwill among stakeholder groups. Should a reputational issue arise, stakeholders are more likely to show support where there is a history of positive engagement and commitment to transparency.
For example, there should be sufficient proximity and contact with clients that, in the event of poor service which falls below the client’s expectations, the client should feel comfortable and welcomed in providing feedback directly to the firm, such as via an established client relationship programme, rather than sharing with others in the market or taking it to RollonFriday.
The benefits of managing corporate reputation
There are many benefits of managing corporate reputation. Increased market share and performance, achieving corporate objectives in shorter time frames, creation of market entry barriers, new product development and enhanced bargaining power, to name a few.
Positive corporate reputation can also reinforce internal and external stakeholder relationships such as increased customer retention, employee attraction, loyalty and retention, improved supplier terms and increased interest from investors.
For example, firms posting low PEP may struggle to remain competitive when attracting high calibre talent. While important, remember there is more to the recruit’s decision making process than financial performance alone. The employee experience, career potential and other benefits should be the foundations of a strong employer brand and employee engagement programme that drives positive perceptions and attractiveness toward potential employees.
This does all point to corporate reputation as a long-term commitment, requiring investment of time and resource. Yet the returns are of strategically significant value that build competitive advantage in a highly competitive marketplace.
Managing corporate reputation – the reality
There are a number of realities which typically impact a law firm’s ability or appetite to manage its reputation proactively.
Corporate reputation in practice tends to sit within the marketing communications function; a ‘soft’ piece to be managed at distance via media and client communications programmes. Effective corporate reputation management needs to go beyond this, taking a strategic, organisation-wide approach, applied as relevant and appropriate to an organisation’s individual stakeholder groups.
I know from many years of inhouse experience that this is easier said than done. Particularly in a professional services environment, where individuals’ personal reputations, or that of their teams, hold currency and can at times seem to be at odds with the firm’s ‘umbrella’ brand.
A further problem is that, in the age of attribution, corporate reputation offers relatively unclear return on investment terms compared with other areas of strategic focus. Yet this should be construed as short-sighted. Reputation has a value, even if it cannot be expressed in wholly financial terms.
Take control of your reputation
Ultimately, reputation should be assessed in the context of corporate objectives. If a firm has failed to achieve its corporate objectives consistently over recent years, which is aligned to reputational weaknesses with major stakeholder groups, there is a compelling case that reputation is not being managed as well as it could and these weaknesses are contributing to the corporate objectives not being met.
A reputational audit will unearth recommendations. Expect these to be organisation-wide, and for implementation to be at a stakeholder level. This could entail communications programmes, or intelligence/data-led approaches to managing and monitoring stakeholder interests, and certainly ownership and collaboration across the organisation.
Whatever the recommendations, as with any change, there are likely to be barriers to overcome, calling on management board buy-in, stakeholder involvement, effective communication and reshaping internal processes to ensure a successful outcome. This requires a degree of adaptablity and agility, essential in today’s legal marketplace.
By developing reputation management as a managed business process, with clear owners, law firms can exploit this highly valuable and unique asset, and expect to see both short and long-term benefits and improved competitive position.
About me
I have over 15 years’ experience managing corporate reputation in the professional services sector. If you would like to discuss managing your firm’s reputation or are interested in conducting a reputational audit, please get in touch: gill@profservices.co.uk.
Corporate reputation is a huge area which I’m extremely passionate about, so please follow me on Twitter and look out for further articles from me!
